Defendant, Federated Mutual Insurance Company (Federated), appeals an order of the circuit court of Sangamon County granting summary judgment to plaintiff, Country Mutual Insurance Company (Country Mutual), in a declaratory judgment action.

I. BACKGROUND

In January 1997, Country Mutual issued an automobile insurance policy, naming Scott Clark as one of its insureds. On February 17, 1997, Scott's father, Patrick, delivered Scott's 1996 Chevrolet truck (Leased Truck) to Smoky Jennings Chevrolet (Jennings) for the purpose of obtaining repairs. Patrick took from Jennings a 1995 GMC Sierra pickup truck (Loaned Truck) to be used while the Leased Truck was being repaired. Several days later, Scott was involved in an automobile accident while driving the Loaned Truck. In January 1998, the driver of the other vehicle, Susanne Howard, filed a lawsuit against Scott and Jennings. Country Mutual tendered the defense of Scott to Federated, Jennings' insurer, on the basis that Federated's policy obligated it to provide primary coverage for the claims made by Howard. Federated denied coverage and Country Mutual provided a defense to Scott in Howard's lawsuit under a reservation of rights. Thereafter, Country Mutual filed its complaint for declaratory judgment. Federated filed a counterclaim requesting declaratory judgment in its favor.

Both parties filed motions for summary judgment. Federated's motion alleged that, at the time that he took the Loaned Truck from Jennings' place of business, Patrick signed an "Assumption of Liability Agreement" (Agreement). That document provided in part that the Loaned Truck was to be driven and used exclusively by and for the accommodation of Patrick and that the Loaned Truck "will be preserved and fully protected from all loss, injury[,] or damage, and any loss, damage, injury, and all expense of maintenance shall be borne by [Patrick] and [Patrick] hereby agrees to indemnify and hold harmless said dealer for all such, and for any claim or claims of personal injury or property damage to others or to [Patrick] arising out of the use or operation of [the Loaned Truck]." The Agreement also stated that Patrick represented that (1) the Leased Truck was covered by public liability, collision, and property damage insurance, (2) such insurance is applicable to the Loaned Truck, and (3) in the event such insurance "be ineffectual" on the date of any accident, Patrick agreed to assume full liability for all loss, damage, or injury to the Loaned Truck, and all liability that may arise out of any accident or collision for damages or injuries to the person or property of any third person.

Federated alleged that, under the terms of Jennings' policy, Scott was not an "insured." It cited provisions of its policy excluding from coverage Jennings' customers who used a covered vehicle without Jennings' permission. Federated maintained that since Scott lacked permission from Jennings to use the Loaned Truck, he was not an "insured" under Federated's policy.

In its motion for summary judgment, Country Mutual alleged that Scott was an insured under Federated's policy, because he had Jennings' permission to use the Loaned Truck. Country Mutual alleged that it was Scott who made the arrangements with Jennings to borrow the Loaned Truck while the Leased Truck was being repaired. Country Mutual also alleged that, under Illinois law, once a named insured gives permission to an initial permittee to use the covered vehicle, that permission extends to subsequent users of the vehicle absent theft or tortious conversion. As Country Mutual's policy provides only excess coverage to Scott on a vehicle not owned by him, and Federated's policy provides primary coverage to vehicles owned by Jennings, Federated's coverage is primary. Country Mutual also alleged that, under the law, a liability policy issued to the owner of a vehicle must cover the named insured and any other person using the vehicle with the named insured's permission.

Attached to Country Mutual's motion were affidavits of Scott and Patrick. In his affidavit, Scott stated that (1) since January 30, 1996, he has been employed by Clark Grain Farms; (2) in February 1996, Patrick assigned to him the Leased Truck for his use and Scott secured insurance in his name from Country Mutual on the Leased Truck; (3) in January 1997, he struck a deer while driving, causing damage to the Leased Truck; (4) prior to February 17, 1997, he called Jennings' employee, Doug Brown, and scheduled an appointment to drop off the Leased Truck and arranged to obtain a vehicle from Jennings to use while the Leased Truck was being repaired; (5) on February 17, 1997, he was busy at work and he asked Patrick to take the Leased Truck to Jennings and pick up the Loaned Truck; and (6) Patrick gave the keys to the Loaned Truck to him and he continued to drive the Loaned Truck and was driving it at the time of his accident with Howard.

Patrick's affidavit stated that (1) on January 30, 1996, he leased the Leased Truck from Jennings; (2) Jennings had previously leased trucks to him for use in his business and was informed by him that the Leased Truck would be used in his business and would be operated by his employees; (3) he assigned the Leased Truck to Scott, his employee, for his use; Scott was to personally pay for its maintenance and insurance; (4) on February 17, 1997, at Scott's request, he delivered the Leased Truck to Jennings for repairs; (5) on that date, at Scott's request, he picked up the Loaned Truck for Scott's use while the Leased Truck was being repaired; (6) he explained to Jennings' service department personnel that he was dropping off the Leased Truck and picking up the Loaned Truck for Scott; (7) on that date, he delivered the Loaned Truck to Scott for his use and gave the keys to him; and (8) Scott had his express permission to use the Loaned Truck.

On November 30, 1999, the trial court entered a written order denying Country Mutual's motion for summary judgment and awarding summary judgment to Federated on the complaint and counterclaim. In doing so, the court noted that Scott was not an "insured" under Federated's policy because he had insurance equal to or greater than the amount required by law. The court also stated that whether Scott had permission to use the Loaned Truck was of no consequence. Neither Patrick nor Scott was an "insured" under Federated's policy.

On December 17, 1999, Country Mutual filed a motion to vacate the trial court's order and for rehearing and reconsideration of the motions for summary judgment. It alleged that the customer exclusion clause of Federated's policy was unenforceable under Illinois law, citing cases involving persons who test-drive vehicles belonging to car dealerships. On January 26, 2000, the trial court entered a written order, allowing Country Mutual's motion to vacate its order granting summary judgment to Federated. In the order, the court cited a decision of this court in Pekin Insurance Co. v. State Farm Mutual Automobile Insurance Co., 305 Ill. App. 3d 417, 420-21, 711 N.E.2d 1227, 1230 (1999), holding that persons who test-drive vehicles owned by automobile dealers must be covered by the dealers' insurance policies and that prior precedent established that the vehicle owner's insurance is primary and the operator's insurance constitutes excess coverage. The trial court in the instant case found that this decision also applied to loaned vehicles. As to the issue of permissive use, the court noted that the affidavits of Scott and Patrick established that Scott arranged to take the Leased Truck to Jennings for repair and to use the Loaned Truck on a temporary basis and that he sent Patrick to make the exchange. Although Patrick signed the Agreement, which provided that the Loaned Truck was for his own exclusive use, the language of Federated's policy extends coverage to those who drive the Loaned Truck with Patrick's permission. The trial court found that the Agreement was unenforceable, citing the Pekin case as authority for holding that Federated, as Jennings' insurer, had the primary responsibility to cover damages resulting from the accident. This appeal followed.

II. ANALYSIS

A. Standard of Review

Summary judgment is proper only where the pleadings, depositions, and affidavits demonstrate that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. (735 ILCS 5/2-1005(c) (West 1998). Accordingly, where reasonable persons could draw different inferences from the undisputed material facts or where a dispute exists as to a material fact, summary judgment should be denied and the issue decided by the trier of fact. Espinoza v. Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d 107, 114, 649 N.E.2d 1323, 1326 (1995). In ...

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